Top Ten Myths About Scholarships

Mark KantrowitzPublisher of Fastweb and FinAid

September 23, 2011

About the Author and this Talk

Mark Kantrowitz is Publisher of Fastweb.com and FinAid.org, the two leading free web sites about planning and paying for college

Mark is a nationally recognized expert on student financial aid and a member of the board of directors of the National Scholarship Providers Association

Mark is the author of the bestselling book Secrets to Winning a Scholarship, which is available through Amazon.com in both paperback and Kindle formats

Overview

1. Only Straight-A Students Win Scholarships

2. Most Scholarships are Just for Minority Students

3. My Child Will Win a Free Ride with Scholarships

4. I'm Not an Athlete, So I Won't Win Any Money

5. Only the Poor Win Scholarships

6. Only High School Seniors Can Apply for Scholarships

7. Private High School Students Win More Scholarships

8. $6.6 Billion in Scholarships Went Unclaimed Last Year

9. Colleges Reduce Need-Based Aid When You Win Scholarships, So Why Bother?

10.Searching/Applying for Scholarships is Too Much Work

Myth: Only “A” Students Win Scholarships

Reality: Students with better grades are more likely to win scholarships, but B and C students do win some

Cumulative GPA on a 4.0 Scale

High School GPA College GPA

% Winning Scholarships

% of Scholarship

Winners% Winning

Scholarships

0.0-1.9 (D- to C) 5.7% 1.3% 7.0% 2.0-2.4 (C to B-) 7.1% 6.2% 9.1% 2.5-2.9 (B- to B) 9.5% 8.1% 10.7% 3.0-3.4 (B to A-) 10.7% 30.0% 13.1% 3.5-4.0 (A- to A) 18.7% 54.4% 18.8%

The Race Myth: Only Minorities Win

Reality: White students win more than their fair share of scholarships, not minority students

Race Percent ofRecipients

Percent Winning

Average Award

White 71.5% 14.4% $2,645

Black or African American 10.5% 11.4% $2,962

Hispanic or Latino 8.1% 9.1% $2,353

Asian 4.4% 10.5% $3,170

American Indian or Alaska Native

1.4% 32.7% $3,967

More than One Race 3.4% 16.0% $4,891

All Minority Students 28.5% 11.2% $3,167

Myth: My Child Will Win a Free Ride

Very few students win a completely free ride• Of students enrolled full-time at a 4-year college

– 0.3% get enough grants to cover the full COA– 1.0% get enough grants to cover 90% or more of the COA– 3.4% get enough grants to cover 75% or more of the COA– 14.3% get enough grants to cover 50% or more of the COA

• Of students winning scholarships, more than two-thirds (69.1%) received less than $2,500

Scholarships are part of the plan for paying for college, but not the entire plan

Myth: Only Athletes Win Scholarships

1.4% of students in Bachelor’s degree programs received athletic scholarships in 2007-08

The average athletic scholarship was $7,855, a third of the total cost of attendance

Athletic scholarships represent only 5.4% of institutional grants and 2.1% of all college grants

Athletic scholarships enable students to attend more expensive colleges, but do not yield a significant financial advantage.• Total institutional grants are $3,979 higher than for

non-recipients, but the cost is $4,560 higher

Myth: Only the Poor Win Scholarships

Reality: Middle-income students are more likely to win private scholarships than lower-income or upper-income students

Most private scholarships are not based on financial need

Full-time Students at 4-Year Colleges

% of Students Winning

Scholarships

% of Aid Applicants Winning

Scholarships

AGI less than $50,000 10.6% 11.3%

AGI $50,000 to $100,000 13.8% 15.6%

AGI $100,000 or more 10.8% 14.3%

Myth: Just for High School Seniors

There are scholarships with deadlines in every month of the year• Deadlines peak in the fall and spring• Summer is the low point

Many families wait until spring of the senior year in high school to figure out how to pay for college, missing half the deadlines for seniors

There are many scholarships for students in lower grades, even elementary school

Continue searching for scholarships after you have enrolled in college

Myth: Private K-12 Students Win More

Reality: Students who graduate from private high schools win more private scholarships, but not enough to compensate for the higher cost of private school tuition• Only about $1,000 more in private scholarships• 48.5% of private-school students enroll at private non-

profit colleges vs. 26.7% of public-school students

Type of High School

% Winning Scholarships

Average Scholarship

% ReceivingAny Merit Aid

Average Total

Merit Aid

Public 12.3% $2,631 27.0% $5,700

Private 10.0% $3,463 30.9% $6,705

Myth: $6.6 Billion Went Unclaimed Last Year

The unclaimed aid myth is based on a 1976-77 academic year study by the National Institute of Work and Learning (NIWL)• NIWL estimated that $7 billion was available from

employers in employer tuition assistance, but only $300 to $400 million was being used

• The myth is more than 30 years old, is based on an unsubstantiated estimate and has nothing to do with scholarships

The only scholarships that go unclaimed can’t be claimed due to restrictive eligibility criteria

Myth: Colleges Will Cut Aid, So Why Bother?

Colleges do displace private scholarships, but most colleges will try to ensure that the student gets some financial benefit• Private scholarships first fill the gap (unmet need)• Then some of the private scholarship money will be

used to reduce the student’s loan and work burden

Every college has an outside scholarship policy which dictates how the college reduces need-based aid when a student wins a scholarship• Check the college’s policy to see how your

scholarship and bottom-line cost will be affected

Myth: Searching and Applying for Scholarships is Too Much Work

Searching for scholarships is the easy part• Fastweb matches your background with scholarships• It takes about half an hour to search the database

Applying for scholarships is hard, but then so is applying for college admission

It gets much easier after your first half-dozen applications, since you can reuse and adapt your previous application essays

Some students don’t like essay contests and small scholarships, making them easier to win